| Dear Members,
The Directors submit their report for the financial year ended
31.03.2015:
Financial Summary:
(Rs. in Lacs)
Year ended Year ended
Particulars 31.03.2015 31.03.2014
Net Sales 41244 46110
Profit before 4698 4470
Depreciation,
Interest and
taxes
Interest 4470 3758
Profit before 228 712
Depreciation and
taxes
Depreciation 1099 2115
Profit (Loss) (871) (1403)
before tax
Provision for Tax - -
Deferred Tax - (195)
Liability (Asset)
Net Profit (Loss) (871) (1208)
after taxes
Operations and Performances:
Due to sluggish demand for textile in domestic and export markets for
the last 4 years, the performance of the Company had been adversely
affected, resulting in losses. Due to continuous losses for the past 4
years and repayment of principal for some of the term loans despite of
losses the liquidity of the Company has also been affected. Due to tight
working capital situation, the capacity utilization was marginally lower
compared to previous year. During the FY 2014-15 under review, your
company has produced 15654 MTs of yarn and 99.81 lakh meters of fabric
as against 16063 MTs of yarn and 106.94 mtrs of fabric in the year
2013-14. The net sale of the company was Rs. 412.24 crs as against Rs.
461.10 crs in the previous year. The company has incurred Net Loss of
Rs. 8.71 crs as against Rs. 12.08 crs in the previous year.
Exports:
During the FY 2014-15 the FOB value of the Company exports was Rs.
133.04 crs as against Rs. 164.76 crs in the previous year. The fall in
exports was due to sluggish demand for yarn in International market and
also due to significant drop in Chinese import of yarn from India. The
cotton yarn exports from India to China dropped by nearly 23%.
Capital Expenditure:
During the year under review your Company had incurred capital
expenditure of Rs. 303.20 lacs.
Board of Directors:
Relevant information on composition of the Board and number of meetings
is provided in 'Board of Directors' section of Corporate Governance
Report which forms part of this Annual Report.
In terms of the provisions of Section 152 of the Companies Act, 2013,
Sri Arun Kumar Agarwal, Director, would retire at the ensuing Annual
General Meeting. He, being eligible offers himself for re- appointment.
Your Board of Directors recommends his re-appointment. Brief profile of
Sri Arun Kumar Agarwal has been provided elsewhere in this Annual
Report.
The Board of Directors of the Company have appointed Shri Pankaj Goel
as Additional Director with effect from 11th August, 2015. Pursuant to
the provisions of Section 161 of the Companies Act, 2013, Shri Pankaj
Goel shall hold office up to the date of the ensuing 32nd Annual
General Meeting of the Company. Considering his varied experience and
expertise, your Board recommends his appointment as an Independent
Director of the Company.
Shri. R. Surender Reddy and Shri. Ankit Jain have resigned from the
office Director on 13th November 2014 and 1 1th August 2015 respectively
due to their pre-occupation and personal grounds. The Board placed on
record its deep appreciation of the contributions made by
Shri.R.Surender Reddy and Shri. Ankit Jain during their tenure as
Director of the Company and wished them all success, happiness and best
of health in life.
Audit Committee:
Relevant information on composition of the Audit Committee and number
of meetings is provided in 'Audit Committee' section of Corporate
Governance Report which forms part of this Annual Report.
Changes in Share Capital
During the year under review, your Company has issued and allotted
3,07,000, 10% Cumulative Redeemable Preference shares of Rs. 100/- each
to Promoters and others on a preferential basis. Consequently the paid
up Capital of the Company has increased from Rs. 35.31 crs to Rs. 38.38
crs.
Directors' Responsibility Statement:
Pursuant to the requirement under section 134 (5) of the Companies Act,
2013 with respect to Directors' Responsibility statement, it is hereby
confirmed that:
(a) in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
(b) the Directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit and
loss of the Company for the period;
(c) the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
(d) the Directors had prepared the annual accounts on a going concern
basis; and
(e) the Directors had laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and were operating effectively.
(f) the Directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
Statement on declaration by Independent Directors:
All Independent Directors have given declarations that they meet the
criteria of Independence as laid down under Section 149 (6) of the
Companies Act, 2013 and Clause 49 of the Listing Agreement.
Nomination & Remuneration Policy:
The company follows a policy on remuneration of Directors and Senior
Management Employees. The policy is approved by the Nomination &
Remuneration Committee and the Board. More details on the same are
given in the Corporate Governance Report.
Whistle Blower Policy:
The Company has a Whistle Blower Policy framed to deal with instance of
fraud and mismanagement, if any in the Company. The details of the
Policy are explained in the Corporate Governance Report and also posted
on the website of the Company.
Related Party Transactions:
All the related party transactions were entered on arm's length basis
and are in compliance with the applicable provisions of the Companies
Act, 2013 and the Listing Agreement. There are no materially
significant related party transactions made by the company with
Promoters, Directors or Key Managerial Personnel etc. which may have
potential conflict with the interest of the company at large. All
Related Party Transactions are presented to the Audit Committee and to
the Board.
Omnibus approval is obtained for the transactions which are foreseeable
and repetitive in nature. A statement of all related party transactions
is presented before the Audit Committee on a quarterly basis,
specifying the nature, value and terms and conditions of the
transactions. The Related Party Transactions Policy as approved by the
Board is uploaded on the company's website at the web link: http://www.
suryajyoti.com/policyonrelated.pdf
Particulars of Loans, Guarantees or Investments:
No Loans/Guarantees / Investments under Section 186 of the Companies
Act, 2013 have been made during the year to the parties listed therein.
Transfer to reserves:
In view of the loss incurred by the Company, no profits are transferred
to reserves.
Dividend
In view of the loss incurred, the Board of Directors of the Company
expresses their inability to recommend any dividend for the year under
review.
Risk Management Policy:
The Company has instituted a proper mechanism for identifying and
establishing controls to effectively manage different kinds of risks
viz., Trend Related Risks, Raw Material Risks, Brand Technology Risks,
Operational Quality Risks, Human Resources Risks, Regulatory Risks and
Financial Risks. The management periodically reviews the risks and
takes steps to mitigate identified risks.
Performance Evaluation:
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out the annual performance
evaluation of its own performance, the Directors individually as well
as the evaluation of the working of its Committees. A structured
questionnaire was prepared after circulating the draft forms, covering
various aspects of the Board's functioning such as adequacy of the
composition of the Board and its Committees, Board culture and
performance of specific duties, obligations and governance.
Familiarization Program for Independent Directors:
The Company has formulated a familiarization program for the
Independent Directors to provide insights into the Company to enable
the Independent Directors to understand its business in depth and
contribute significantly to the Company. The details of such program
are available in the Company's website www. suryajyoti.com.
Fixed Deposits:
Your Company has not accepted any fixed deposits and as such no
principal or interest was outstanding as on the date of the Balance
sheet.
Extract of Annual Return:
An Extract of Annual Return prepared in accordance with Section 92(3)
of the Act in Form MGT-9 is annexed as Annexure - I' to this report.
Management Discussion & Analysis:
Pursuant to the provisions of Clause 49 of the Listing Agreement, a
report on Management Discussion & Analysis is herewith annexed as
'Annexure - II' to this report.
Corporate Governance:
The Company has been making every endeavor to bring more transparency
in the conduct of its business. As per the requirements of the Listing
Agreement with the Stock Exchanges, a compliance report on Corporate
Governance for the year 2014-15 and a Certificate from the Auditors of
the Company are furnished which form part of this Annual Report.
Disclosure under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013:
The Company has in place an Anti Sexual Harrasment Policy in line with
the requirements of the Sexual Harrassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints
Committee has been set up to redress complaints received regarding
sexual harassment. All employees (permanent, contractual, temporary and
trained) are covered under the Policy. The following is a summary of
sexual harassment complaints received and disposed off during each
year:
a) No. of Complaints received - NIL
b) No. of Complaints disposed off - NIL
Human Resources:
Your Company considers its Human Resources as the key to achieve its
objectives. Keeping this in view, your Company takes utmost care to
attract and retain quality employees. The employees are sufficiently
empowered and such work environment propels them to achieve higher
levels of performance. The unflinching commitment of the employees is
the driving force behind the Company's vision. Your Company appreciates
the spirit of its dedicated employees.
Significant and material orders passed by the regulators or courts:
There are no significant material orders passed by the Regulators /
Courts which would impact the going concern status of the Company and
its future operations.
Statutory Auditors:
M/s Brahmayya & Co., Chartered Accountants, the statutory auditors of
the Company holds office upto the conclusion of the ensuing Annual
General Meeting and have confirmed their eligibility and willingness
for re-appointment.
Internal Auditors:
The Board of Directors based on the recommendation of the Audit
Committee have re-appointed M/s. K.S.Rao & Co., Chartered Accountants,
Hyderabad, as the Internal Auditors of your Company. The Internal
Auditors are submitting their reports on quarterly basis.
Cost Auditors:
In accordance with Section 148(3) of the Companies Act, 2013 and The
Companies (Audit and Auditors) Rules, 2014, the Audit Committee has
recommended and the Board of Directors had appointed
M/s.S.G.Ramakrishna & Co., Cost Accountants, Hyderabad, being eligible
and having sought re- appointment, as Cost Auditors of the Company, to
carry out the cost audit of the products manufactured by the Company
during the financial year 2015-16 on a remuneration of Rs. 19,000/- .
The remuneration payable to the cost auditor is required to be placed
before the Members in a general meeting for their ratification.
Accordingly, a resolution seeking Members' ratification for the
remuneration payable to M/s.S.G.Ramakrishna & Co., Cost Accountants, is
included at Item No.6 of the Notice convening the Annual General
Meeting.
Secretarial Audit:
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and The Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has appointed Mrs. N. Madhavi,
Company Secretary in Practice to undertake the Secretarial Audit of the
Company. The Secretarial Audit Report is annexed as 'Annexure - III' to
this report.
Particulars of Employees:
There are no employees in the Company, particulars of whom are required
to be furnished under Section 197 read with Rule 5 of The Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014. The
industrial relations were cordial at all units of the Company.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo:
The particulars as prescribed under section 134 (3) (m) of the
Companies Act, 2013 read with Rule, 8 of The Companies (Accounts)
Rules, 2014, are set out in 'Annexure - IV' to this report.
Acknowledgements:
Your Directors wish to place on record their appreciation for the
valuable support and co- operation extended by State Bank of India,
IDBI Bank, State Bank of Hyderabad, Indian Overseas Bank and State and
Central Government Agencies.
Your Directors also wish to place on record their sincere appreciation
of the contribution made by the employees of the Company and are
thankful to the Shareholders for their continued patronage and support.
For and on behalf of the Board of Directors
R.K. AGARWAL A.K. AGARWAL
Managing Director Executive Director
DIN: 00011349 DIN: 00011126
Place : Secunderabad
Date : 11th August, 2015
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